According to insiders, the US Securities and Exchange Commission is particularly interested in possible conflicts of interest of the accompanying banks in its investigations into empty wallets. The flood of IPOs by “Special Purpose Acquisition Companies” (SPACs) in the past few months had brought the SEC to the scene. These so-called SPACs use the proceeds to search for acquisitions, so the companies they take are listed on the stock exchange quickly and at low cost. Above all, the supervisory authority is investigating whether the remuneration structures for the investment banks have led them to drive the SPACs into transactions with unsuitable takeover properties, to the detriment of investors, said three people familiar with the surveys of the banks told the Reuters news agency. The SEC has information on the fees from Citigroup, among others,Credit Suisse, Morgan Stanley and Goldman Sachs requested who accompany most of the SPACs to the stock exchange, the insiders said. The institutes did not want to comment on this.

The SEC focuses on fees that the banks receive from the initiators of the SPACs.

They usually receive 5.5 percent of the proceeds from the issue - part in advance, the other part later, when the SPAC founders have found a company to slip into the mantle of the stock market.

The bankers can therefore earn more money if they also advise the takeover property and help the SPAC to collect additional funds for the takeover from investors.

"The big issue for the SEC is whether the consultants have a conflict of interest," said one of the insiders.

That could be the case if the investment bankers worked for both sides.

Dressed up takeover candidates

Critics warn that the advisory bankers could paint too positive a picture of the takeover candidates or withhold possible problems. Investors would suffer if the company developed worse after the takeover and the SPAC's share price collapsed. SPACs are a way for young companies in the USA to go public, with which they can avoid the traditional and lengthy approval procedures for a new issue. But some of them are not yet ready for the stock market. Most recently, the share prices of SPACs lagged the blue-chip S&P 500 index.

The SPACs' records must state the fees that are paid to auditors and lawyers, but not those for the banks. The SEC wanted to close this knowledge gap with its inquiries, said the insiders. In addition, it is a question of whether the investment bankers have examined the takeover candidates and their forecasts accurately enough before recommending the takeover to a SPAC. Some banks have already drawn conclusions from the inquiries and have put their processes to the test.